In Germany, where I live, it is included in the prices of most goods and minor services. For major services, the invoice is just like in the USA in states with a sales tax, but it is applied to everything. If you have a €5000 accountant's bill, it will usually show the 19% VAT added on. However, if you buy a car, go to a restaurant or buy a ticket at a movie theater, the invoice will often be a round figure, saying "includes 19% VAT of (however much it is)." Most everyone pays it on most everything. It hits low income people hardest, of course, because it is applied to just about everything except medical bills.
At every turn, the government cashes in 19%. It has been called government heroin, because once it was introduced, it was always increased, never decreased, and the number of goods and/or services exempt always decreases. If you buy some appliance for €100, you have bought it for roughly €82 (rounding) and the store passes the €18 on to the government. The store paid the wholesaler maybe €50 for the appliance. That €50 also included 19% VAT, which the government again gets. The parts, if made in the EU, also included 19% when sold to the manufacturer. So did the cardboard box in which it was packaged. So did the printer's work to print up the cardboard box. Etc. Etc. If something was made outside the EU, it is subjected to a 19% import tax to replace the domestic VAT. There are a thousand tiny modifications, exceptions, intricacies and other loophole tricks (helps EU accountants stay in business), but that is essentially how it works. There is a reason the cost of living here is so high. A friend of mine is a judge on a tax court here and a professor of tax law at the university of Bonn.
Years back, the German government decided to put VAT on gas at the pump (again: regressive. You don't see it, it is included in the retail pump price). The thing was, the pump price already included the gasoline (about 40% of the price) and the gasoline tax (about 60% of the price). The VAT was imposed on the TOTAL, so Germans pay 19% tax not just on the gasoline, but also on the gasoline tax! I asked my friend if this wasn't totally illegal to make citizens pay tax on a tax? He said yes, it was, and if I had five years and three million euros for legal fees, I could probably successfully fight it in court. You get the picture.
For a while, the Germans even tried to put their 19% on low margin things like investment gold, which usually has a 1% or 2% margin of profit for the dealer. That put dealers in Germany out of business and drove the business to places like Luxembourg and Switzerland, who were smart enough to realize that you can't tax something at 19% if the profit margin is 2%. The EU countries quickly figured out the error, and exempted such transactions from VAT, a rare acknowledgement of reality from an area that prefers theories.
In the USA, each State already has its own sales tax (or not, as in the case of New Hampshire and a few others, but at least, it's their decision), so a national sales tax or VAT would be extremely difficult to implement--or justify, for that matter. Would we then prohibit states from having their own local taxes? And if so, which ones? Who decides? (We know--uncaring, clueless bureaucrats, that's who!)
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